Bioniche has three businesses with diversified risk/reward profiles: Animal Health, which is expected to generate around $28 million in sales in fiscal 2010; Human Health, with Phase 3 results expected in mid-2010 from lead product, Urocidin, testing for bladder cancer; and Food Safety, with Canadian approval and a conditional license pending in the U.S. of a vaccine for reducing E. coli 0157 in cattle feces, and a pipeline of other vaccines.

Mr. Martin points out that Urocidin provides the “biggest upside potential” for Bioniche investors. His initial diligence suggests that Urocidin has a “relatively high overall probability of approval,” even though the first of two planned Phase 3 trials has a moderate level of risk, as the refractory patients enrolled in the trial are a “tougher-to-treat” population than was enrolled in the Phase 2 trial, he says.

Mitigating the risk somewhat is the 20% “complete response” hurdle required for Phase 3. That compares with the company’s Phase 2 results, where patients achieved a 46.4% CR rate at 26 weeks in a population that was mainly relapsed but also included a few patients being treated for the first time.